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Monday, November 06, 2006

Greens propose insane bills on climate change

I don’t recall what MP said that the thing about the Greens was that it was odd that a party that was so concerned about the planet spent so little time on it, but its latest flurry of draft Bills to “combat climate change” are perfect examples of this. Besides the legislation fetish (pass a law to stop it happening or make it compulsory - demonstrating the Green penchance for authoritarianism), you don't have to guess what they MUST have been smoking when they wrote this.

There is one requiring the government to buy little cars (I couldn’t really give a toss about that frankly, except they have allowed the cops to have cars they can use to chase suspects - and well the government can regulate itself if it wants). There is one requiring electricity companies to eliminate fixed charges (so you can subsidise the cost of keeping accounts open for people who only use electricity occasionally at their bach, even though they want the lines to be available 24/7/365).They also want the Cullen fund to start investing in ways to minimise greenhouse gas emissions – which, given the Green grasp of fundamental economics, is simply scary. The Greens have to win an award for most wanting to set money on fire.

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However, it is the transport ones that, unsurprisingly, come out as being incredibly loopy.

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So, without getting into the debates about whether man made climate change is happening or not, let’s purely look at the merits of the Green’s proposed bills to tackle transport related greenhouse gas emissions.

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First, there is one to require all airlines to cap their current emissions (so don’t expect more flights) and then reduce them to 1990 levels.Now ignoring the fact this will breach the Convention on International Civil Aviation, this would mean a major hit to tourism and domestic air travel. Yes, airlines have been buying more fuel efficient aircraft, but aviation has been growing as well. So it would be back to $1200 return flights to Australia, infrequent provincial domestic flights and flying would, once again, be the preserve of the more wealthy. There would be jobs lots in tourism and export industries that use air cargo, but hey why should the Greens care? Ironically, Air NZ would be hit most hard, after all, its foreign competitors wouldn’t face these restrictions elsewhere and could probably take the hit after cutting their own number of flights. Of course, this wont affect climate change one iota – because one year of Chinese aviation growth would outstrip any “gains” from this proposal.

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Another Green proposal is a bill to require that two thirds of your road taxes be spent on transport modes other than roads (they don't need a bill to do this, the last one they supported means the Minister could direct this if she was so inclined). So this means massive subsidies to public transport, walking and cycling, rail, coastal shipping and travel demand management. Of course, to do this would mean not only ceasing all new road construction (that means new signage at intersections as well as motorways – ALL road improvements would have to end), but a 17% cut in road maintenance spending. So welcome those potholes, for the buses and bikes too – but hey, roads are bad aren’t they, rails are good? (much like four legs good two legs bad).Oh and if you wondered about delivering freight around town, it goes by rail, or by bus – think about it.

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However my favourite for sheer lunacy is the bill requiring the entire rail system to be electrified or using bio diesel by 2012. The Greens have even listed the lines they want electrified by then – being such transport experts, they must have got it right (hmm Christchurch-Greymouth means coal export trains – which form 90% of the trains on this line – will change locomotives twice in each direction as the coal goes from elsewhere on the West Coast to Lyttelton, but hey don’t argue with central planners). Of course this means almost all current locomotives get scrapped (no point retrofitting any, since almost all are more than halfway through their economic lives)275 of them, at an average cost of (lets be generous assuming shunters are cheap) $2 million each. So there you have it, $500 million for locomotives alone (you’ll easily need $50 million in spares as well).

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However, the actual Think Big electrification (it is many times greater than the scheme Muldoon imposed) is amazing in itself.We are talking billions of dollars, because it isn’t just about stringing up wires and poles (and thousands of them), but also lowering tunnels, replacing the signals along the lines (electrification interferes with signals), safety protection at bridges (because high voltage lines mean electricity can “jump” a metre or so) and complete replacement of any copper wire telecommunication lines near the track. Given the electrification of the centre of the main trunk cost $350 million in 1986 dollars, which today be $600 million (excluding locomotives) – we are probably talking about another $3 billion. Given the current value of the entire NZ railway business is $600 million – I doubt this would increase its value fivefold!!

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Of course all this electrification may actually be no cheaper to run, but if it is – it will be a subsidy to the main rail freight using industries – dairy, coal and forestry (and export containerised freight). I wonder what the greenhouse gas profile of those industries is?

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So what would this be for?It is apparently to eliminate the greenhouse gas emissions of the rail industry. What would the cost of those emissions be if New Zealand bought them under an international carbon trading scheme at an estimated high end price? The government's own study, which the Greens quote at their convenience says$5 million in 2002.$5 million!!! $3.5 billion to save $5 million a year!! You could earn $175 million off $3.5 billion on a bank deposit. Ahhh I see the Greens protest, saying that they want more freight to shift from road to rail saving more. OK, so lets say ALL road freight (other than local delivery vehicles) went by rail – patently absurd since railway lines don’t go everywhere and railways are usually inefficient at moving freight less than 150km – then the total cost of the carbon credits that are saved is $53 million a year. Still light years away from being a good use of your money – even if you had given permission for the Greens to spend it.

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So there you have it – even if you do believe that man made climate change needs to be combated, ask yourself if you are prepared to pay the price of:

-Shrinking the NZ tourist industry;

-Shrinking the NZ export sector dependent on air cargo;

-Significantly increasing the price of air travel for NZers;

-Rougher and more pot-holed roads as maintenance is deferred year after year;

-No road improvements of any kinds, from motorways to minor safety improvements;

-$3.5 billion in rail spending to get a gain that is probably at best $10 million a year.

No doubt they’ll say I’m mad and ignoring the Armageddon like catastrophe of climate change – in which case – I’ll remind them that they are mad – and that to slowly bankrupt an economy, because of ideological blinkering puts the Greens on a path worse than Muldoon.

6 comments:

at least the greens are thinking pro-active not re-active like the rest, the only problem is that they need to get there facts a bit right

theres no point getting an electric shunter (battury electric possibily anynother story) as they are shut down most of the time and most sideings dont have overhead wires (even in eroup)

where electric locos would be good is on the NIMT from Auckland to palmerston nth, ECMT to Tarnonga and Mildline line from littleton to greymouth (this line was electic in two places in the past)all the new lines should be 25kV Ac but keep wellington at 1600VDC and extend to masterton and levin

buses and roads well never solve our trafic problems alone, rail is required as the backbone and as such needs lots of money porded into it just like roads has had for the last 20-30 years.

Anonymous, besides your decimation of place names (Tarnonga??), the cost is still enormous. Frankly, NZ could abandon its entire rail network and would face barely any increase in noticeable traffic congestion, except approaching central Wellington in the AM peak.

In case you hadn't noticed, rail had well over $1 billion poured into it in 1982 and 1990 to bail it out. Almost all road spending in the last 30 years came from road users - most rail spending came from taxpayers.

I have to agree that electrifing the whole system is an expense best not entered into. But Bio Diesel if the blenhiem sewerage project is sucessful would be an answer, as no refits are necessary to burn this fuel.

You mention that between 1982 and 1990 rail had $1 Billion from the taxpayers pocket. Well when you use your transport infrastructure as a work for the dole scheme, what do you expect. Does road pay all its costs? such as ACC, Policing?

I'm not quite sure how you managed to come up with the concept that rail is inefficient at distances less that 150kms. Sure taking a box of fruit to the corner dairy is very inefficient, but if the tonnage is significant then rail can economically move freight over a very small distance.

Just as aside, an 800ton train from Invercargill to Dunedin will burn 800 litres of Diesel fuel. This means that 1 ton got transported 230km and burned 1 litre of fuel. I bet your car does not get that kind of fuel economy

Well as long as biodiesel makes economic sense, then fine. You're right about transport being work for the dole, a very inefficient one too. Actually road does pay ACC and policing costs, you'll find the ACC motor vehicle account is fully funded by a combination of motor vehicle license fees and fuel taxes, and policing comes from the National Land Transport Fund.

The argument that rail is at a huge disadvantage to road is greatly exagerated and sometimes wrong. I used to think the opposite, till i did the work on it.

I said usually inefficient - which means there will be exceptions for bulk commodities depending on the route, but simply the doubling handling adds a lot to the costs.

Your rail fuel consumption stat doesn't surprise me, and frankly rail needs to achieve this to be at all competitive given:- largely bespoke vehicles that are expensive (but last longer);- dedicated infrastructure rarely used compared to the parallel road;- double handling adding time/fuel/manpower delays at each end.

I'm far from anti-rail, but I find the Green religion that trains are a path to salvation and trucks are the devil to be inane - since they take such a childlike school prefect approach. If both modes are treated equally by government, the right answers will come out.

I couldn't agree more on the last sentence, the Greens seem to make rail out to be the saviour to road use when each mode has advantages and disadvantages, along with coastal shipping. A more balanced policy from all sides would mean our transport infrastructure is being used at its most efficient state for the time.

The road industry also has a lot of internal double handling, a few line haul units get transferred onto urban units and the like

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About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.